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Increase in tenants facing rent difficulties
There has been an increase in tenants struggling to meet their rental payments, according to the Association of Residential Letting Agents (ARLA).
Two thirds (65%) of ARLA members surveyed said they had noticed an upsurge in the number of tenants having difficulties paying their rent in the last six months.
93% of ARLA members also reported that they have seen a hike in tenants haggling with landlords over rents since the beginning of the year. Agents noted that this wasn’t just due to people having a necessity to cut costs, but also down to some tenants looking to take advantage of the downturn in prices within the rental market.
The number rose to as much as 98% for members in Prime Central London, an area that has traditionally seen strong demand from the international and finance sectors, both of which are under pressure to cut costs.
Ian Potter, Operations Manager of ARLA, said: “This is very worrying. With the private rented sector continuing to grow, providing much-needed choice to a vast number of people, it is vital that support is given for the most basic of privileges: a roof over one’s head.
“Tenants who have become unemployed and applied for Local Housing Allowance will automatically fall into the late payment category, as the benefit is unhelpfully paid monthly in arrears when rents are due in advance.
“There’s been a lot of talk about the Homeowner Mortgage Support Scheme of late but as far as I can see, tenants are being forgotten completely. That’s inexcusable in a climate such as this. Changes to support tenants faced with eviction due to landlords having property repossessed were introduced in April although no benefit is yet seen filtering through to the market place.”
Despite tenants struggling to meet their rental commitments, ARLA data shows that the number of new tenancies agreed has actually increased slightly over the last quarter, from 32 to 33.
Sam Younger, chief executive of Shelter said: “As unemployment rises and the recession begins to bite, more and more people across the country are struggling with their housing costs. While we welcome the raft of initiatives the government has introduced to protect homeowners in mortgage arrears, Shelter would like to see further attention given to supporting tenants who are finding it just as difficult to make ends meet.
“Our research shows that private tenants are most likely to be paying the highest proportion of their income on housing, and some 70% are making sacrifices to pay their rent. In association with the Money Advice Trust, Shelter will be publishing further research this autumn into the particular financial difficulties faced by lower income private tenants.”
The data from the second quarter of the ARLA Members’ Survey of the Private Rented Sector is drawn from 730 offices. The survey is supported by mortgage lenders Mortgage Express and Paragon Mortgages. Together with the Survey of landlords, this forms part of the quarterly ARLA Review and Index. All surveys and statistics can be downloaded from www.arla.co.uk.
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